New Delhi, 20 November 2014
Multinational retailer Wal-Mart on Thursday refuted the allegations made by Cobrapost.com of foreign direct investment violation in India and insisted that it regularly conducts membership audit internally to keep a tight vigil and continuously improve strict compliance norms.
Cobrapost, which recorded the entire operation on video, had shared its findings exclusively with HT. Based on that, HT reported on Thursday that Wal-Mart, Metro Cash & Carry and Carrefour, which are allowed to sell goods and merchandise only to wholesale customers in India, are blatantly violating rules and selling to individuals.
Wal-Mart claimed it has deactivated membership of more than 1,50,000 members over the years due to failure to furnish renewed business licenses. “I would like to highlight membership is rejected… terminated… in case it is found that the business license provided by the member is not valid or the member is unable to produce a valid license,” Rajneesh Kumar, vice-president, corporate affairs, Walmart India, in an email response to HT.
On Thursday, Cobrapost.com editor Aniruddha Bahal said: “If a proper investigation is done by the commerce ministry on the membership base, specially focusing on the add-on cards, I am confident there will be a big chunk of people, who would not qualify to be either resellers or institutional investors…”
“Does commerce ministry have a process to monitor what these stores are doing,” Bahal questioned.
Minister of state for commerce and industry Nirmala Sitharaman, when contacted by Hindustan Times, for her response on the issue declined to comment.
“It is not possible for such global firms to violate legal agreements with a sovereign entity…They would have followed all the norms,” said Devangshu Dutta, chairman, Third Eyesight, a retail consulting firm.
However, Wal-Mart refused to respond on how individuals were purchasing from these cash-and-carry stores as shown in the Cobrapost.com video.
“At Wal-Mart, we adhere to very strict compliance processes and have a robust membership process. We are not only fully compliant with the foreign direct investment (FDI) regulations in the country but also remain fully committed to follow the laws of the land,” said Kumar.
Carrefour and Metro had not responded to a detailed questionnaire on the FDI violations at the time of going to print.
(Published in Hindustan Times )